by CHRIS ROGERS
WinCraft's proposed new manufacturing, warehouse, and distribution facility is expected to be worth $5.7 million and will utilize around $770,000 in public assistance to prepare three lots in Winona's Technology Park for development, according to a detailed plan for the project released last week. On January 20, the Winona City Council is expected to decide whether the public aid for the project is justified.
The public assistance proposed for the WinCraft project is a special way of funding new developments called a tax increment financing (TIF) district. Instead of using the money from new taxes generated by a new development, local governments set aside the increase in tax revenue (the tax increment) generated by a new building and use that money to retroactively reimburse some of the costs of developing the building. By law, TIF districts may be used to enable development that would not be possible without public assistance. WinCraft plans to raise its own capital funding, which will be subsequently reimbursed by the city with TIF funding; however, the TIF plan would also authorize the city to borrow money to finance the project.
Over nine years, the WinCraft TIF district is expected to generate $850,000 in new taxes that would be set aside to reimburse some of WinCraft's development costs. Around $163,500 of that money would otherwise be collected by the Winona Area Public School District. Around $332,300 would otherwise be collected by Winona County. State and city taxes account for around $360,000 of the TIF funding.
The majority of that money, $768,130, would be used for site improvements and site preparation, including remediating the poor soil at the lots. Technology Park is part of Riverbend Industrial Park, which includes the large retail stores on Winona's East End and several manufacturers and other industrial sites. The area was once a wetland. The city spent $4 million using dredge material from Lake Winona to infill the wetland and create the industrial park in 1998. The lots where WinCraft hopes to build contain too much compressible, organic soil to support a large building. City officials have said that replacing the soil with sand, surcharging the soil, or driving pilings to support a foundation would be one of the primary uses of the TIF funding. Building parking lots are also a permissible use of TIF funds.
In its recently released TIF plan, the city stated that without TIF funding or some other public assistance, the lots WinCraft hopes to build on could not be developed. "The city believes that no alternative development is likely to occur without similar assistance," the city's TIF plan states.
When asked if she believed that no development was possible at the property without public assistance, Winona Economic Development Director Lucy McMartin said that she thought that at some point in the future, development might occur without a TIF district, but that any development the size of the WinCraft project would likely require help. "If there were a development of simply something that doesn't need any sort of foundation, perhaps that could happen, but any significant structure would need these site improvements," she stated.
Under state law, the use of TIF districts are justified if the proposed development would produce more new taxable property value than the site would otherwise. The WinCraft TIF district proposal would meet that standard, unless a non-TIF development could generate $5 million in new property taxes.
The remainder of the TIF funding, $85,348, would be used for administrative expenses, such as the cost of preparing expense reports for the state auditor. That amount — 10 percent of the total TIF funding — is the maximum allowed for administrative expenses under state law.
The project is expected to create at least 10 jobs. If approved, WinCraft hopes to finish the project this year.
Fastenal seeks city OK to sell Hwy. 61/Pelzer property
Fastenal is interested in selling a small piece of its JC Penney property, a sliver of land between Pelzer Street, Service Drive, and Highway 61. The city owns an easement through the grassy strip bordering the highway, which was once used for Service Drive, but is no longer needed since the street was rerouted, explained Fastenal Vice President Dana Johnson. Johnson is also a city of Winona Port Authority Commission member. The City Council will decide whether or not to vacate the easement at its meeting on Monday at 6:30 p.m.